Tiko Garment Factory is considering expanding its operations by opening a plant in another part of the country. The company's finance manager is attempting to conduct an analysis of the Net Present Value of the planned expansion and has gathered the following information:

Extract from the company's Balance Sheet, in thousands of dollars

Common Stock $$100,000$

Long term Debt $$150,000$

Preferred shares$ $50,000$

Additional Information:

The company currently has $\%9$

coupon, annual payment bonds which were issued at $90$ percent of par, with $20$ years ot maturity. A new issue of bonds would attract flotation costs of $4\%.$

The company's common shares which have a book value of $$25$ per share are currently selling at $$20$ per share.

The company stock is considered to be $1\mathrm{.}25$ times as risky as the average market stock and the current Treasury bill rate is $40.\%.$ The market risk premium is $2\mathrm{.}5\%.$

The company preferred shares are $5.\%,$ $$100$ par preferred shares selling ta $$81$ per share. There are $10,000$ shares outstanding.

The company's tax rate is $35\%.$ Calculate the weighted average cost of capital without the use of Excel or a financial calculator.